The future workforce will need advanced qualifications and technical skills, yet one in five school-leavers doesn't make the grade.

Hopes of an economic boom driven by a highly-skilled Kiwi workforce could be dashed by the number of illiterate and innumerate adults.

One in five students is leaving school without qualifications. Some struggle so badly they cannot fill out the unemployment benefit form.

Politicians and literacy experts say the employment prospects for a sizeable chunk of the population are shrinking as machines such as the supermarket self-checkout replace traditional service jobs.

The European Centre for the Development of Vocational Training says the number of low-skilled jobs will fall by 51 per cent this decade, while highly skilled jobs will increase only 21 per cent.

Here, Education Minister Hekia Parata is warning we cannot afford to waste another generation – five out of five students must be literate. "Some kids are leaving school not only without a qualification, but not literate or numerate."

Then there are the students who can read and write, but have no qualifications. Last year 31 per cent of students left school without level 2 NCEA, the equivalent of Sixth Form Certificate.

The Government aims to reduce that to 15 per cent by 2016 – an extra 7500 to 10,000 students passing year 11 each year. "There are schools bringing about successful change, there are schools doing reasonably well, and there are schools where we need to see a lift," Parata says.

The number of students achieving level 2 jumped from 59 per cent to 69 per cent between 2006 and 2011, with the biggest increases seen in Maori and Pasifika students, but Parata says that's "not enough".

Michael Dally has helped hundreds of illiterate adults during his 12 years as manager of Horowhenua Adult Literacy Services. "What surprises me is the number of people now coming forward. In the past, when jobs were plenty, it didn't matter. You would get a job at the freezing works or railway."

But now even low-skilled jobs demand basic literacy and numeracy, he says. Army recruiters, forestry companies and trucking firms expect jobseekers to have minimum literacy levels. "Those guys who drive the big rigs up and down the motorway. The trucks are worth half-a-million dollars. Are you going to put someone in charge who can't work a GPS scanner?"

As well as his drop-in students, Dally also sees people referred by Work and Income, police, the courts and employers. Some cannot even fill out the form to get an unemployment benefit.

A 2006 survey found 43 per cent of adults with some sort of literacy issue, and half the population with numeracy difficulties.

Dally says struggling students often give up without one-on-one support. "You get frustrated, then you get angry and switch off."

And it is not only the people struggling to fill in forms who are causing concern. Secondary Principals' Association president Patrick Walsh says universities are worried by a fall in academic literacy among students.

Part of the problem lies in the rise of technology. Students are turning on Facebook and iPads rather than picking up a book. "It's not emphasising the ability to read and write well."

In exams, students at level one could now answer history questions in bullet points rather than essay form, he said. "The ability to put sentences together in a coherent way is a skill that has diminished. It's going to have a long-term effect on students."